Free Markets, Free People

Monthly Archives: April 2012


Economic Statistics for 24 Apr 12

The following statistics were released today on the state of the US economy:

Redbook is disappointing today, showing same-store, year-over-year retail sales up only 2.7%. In contrast to Redbook, ICSC-Goldman shows a 0.8% increase in sales over last week, with the year over rate rate up 3.6%.

New homes in March were sold at a 328,000 unit annual rate. This was slightly less than expected but was offset by large upward revisions to prior months.

The Case-Shiller Home Price composite 20 city index rose 0.2% last month, following a revised 0.1% dip the prior month. Home prices keep bouncing along the bottom. Meanwhile, the FHFA reports house prices in February rose 0.3%, following a 0.4% decline in January.

The Consumer Confidence Index fell one full point in April, to 69.2, mainly on falling income expectations.

The State Street Investor Confidence Index is down a sizable 3.9 points this month to 87.7, indicating falling confidence among institutional investors.

While manufacturing has been weakening according to other data, the Richmond Fed’s Manufacturing Index rose 7 points to 14.

~
Dale Franks
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New tone: How culpable is the news media and the left in this crime? (Update)

I ask because I have found the coverage of the Trayvon Martin shooting and death to be sensationalist and, many times, based in rumor later found to be incorrect.

Or, to put a finer point on it, the coverage of the case has been anything but objective and fact based.

For instance, the original reports that said the incident was a white on black killing.  In fact, Zimmerman isn’t white.  He’s Hispanic.  ABC then published a video from the police station claiming there was no evidence of injury.  A closer look revealed ample evidence of injury, but that meme had already traveled the world twice.  MSNBC, not to be out done, made the claim that Zimmerman uttered a racial slur that was caught on the 911 tape.  Again, when examined more closely, it appeared clear that it wasn’t a racial slur at all, but a comment on the weather.

Meanwhile, the race baiters, attracted to the killing like sharks to chum, had picked up on the story as presented by the media and converged on Sanford FL, the site of the killing, to seek “justice” for Trayvon Martin.

Well, apparently some of it was served yesterday … in Mobile, AL:

Mobile police need your help to catch a mob that beat Matthew Owens so badly that he’s in critical condition.

According to police, Owens fussed at some kids playing basketball in the middle of Delmar Drive about 8:30 Saturday night. They say the kids left and a group of adults returned, armed with everything but the kitchen sink.

Police tell News 5 the suspects used chairs, pipes and paint cans to beat Owens.

Owens’ sister, Ashley Parker, saw the attack. "It was the scariest thing I have ever witnessed." Parker says 20 people, all African American, attacked her brother on the front porch of his home, using "brass buckles, paint cans and anything they could get their hands on."

And, according to Ms. Parker, as they were leaving something else occurred:

What Parker says happened next could make the fallout from the brutal beating even worse. As the attackers walked away, leaving Owen bleeding on the ground, Parker says one of them said "Now that’s justice for Trayvon." Trayvon Martin is the unarmed teenager police say was shot and killed February 26 by neighborhood watch captain George Zimmerman in Sanford, Florida.

The left is fond of trying to blame the right for inciting incidents of violence.  The Gabby Gifford shooting is the most recent example. 

I have to wonder if the news media who sensationalized the Martin shooting and the race hustlers who inflamed the situation are willing to take the blame for this beating?

UPDATE: Ace points to two more beatings that appear to have been motivated by the Martin case.

~McQ

Twitter: @McQandO


British climate alarmist recants his alarmism

Interesting.  True confession time I guess

James Lovelock, the maverick scientist who became a guru to the environmental movement with his “Gaia” theory of the Earth as a single organism, has admitted to being “alarmist” about climate change and says other environmental commentators, such as Al Gore, were too.

Gee, we’d have never guessed.

Lovelock goes into some further detail:

“The problem is we don’t know what the climate is doing. We thought we knew 20 years ago. That led to some alarmist books – mine included – because it looked clear-cut, but it hasn’t happened,” Lovelock said.

“The climate is doing its usual tricks. There’s nothing much really happening yet. We were supposed to be halfway toward a frying world now,” he said.

“The world has not warmed up very much since the millennium. Twelve years is a reasonable time… it (the temperature) has stayed almost constant, whereas it should have been rising — carbon dioxide is rising, no question about that,” he added.

So in essence, what Lovelock is saying is a) he was wrong about his predictions and b) in actuality they really don’t know what is happening although they have this theory which isn’t panning out the way they thought it would.

Great.

So much for the value of consensus huh?

To his credit, at least, Lovelock admits to the mistake. 

Would that the rest of the alarmists had that sort of integrity.  Instead, many choose to double down and make themselves even less credible.  One wonders if Lovelock’s admission might give some others the courage to recant as well.

Oh, and Lovelock makes an important point:

Asked if he was now a climate skeptic, Lovelock told msnbc.com: “It depends what you mean by a skeptic. I’m not a denier.”

Yeah, neither am I.  I’m a skeptic.  Climate changes.  It has throughout the history of the planet.  And we’ve had periods of higher CO2 and higher temperatures in our history, neither of which could be linked to man.  Additionally:

He said human-caused carbon dioxide emissions were driving an increase in the global temperature, but added that the effect of the oceans was not well enough understood and could have a key role.

“It (the sea) could make all the difference between a hot age and an ice age,” he said.

I am skeptical of his first statement and much more likely to find credence in the second, i.e. it is the oceans of this world that drive climate change, not man.  Additionally, it seems to me that, at least to this point, the skeptic’s theory of low sensitivity of the climate to CO2 seems to be more valid than the alarmists theory of high sensitivity.  Had the alarmists been right, as Lovelock points out, we should be frying right now.

Most importantly is his admission that “twelve years is a reasonable time”.  It has provided enough time for a trend to develop that debunks the alarmist’s predictions. 

Finally Lovelock admits that which has been painfully evident to most skeptics, given the trend of those 12 years – “we don’t know what the climate is doing.”

That is correct.  And until we do we need to quit trying to make economy killing policy based on what the evidence is currently telling us is a faulty theory.

Or said another way, we need to use actual science to drive policy, not pseudo-science that supports a political agenda.

I should be able to get consensus on that, no?

~McQ

Twitter: @McQandO


Medicare Advantage: October surprise?

You remember the $500 billion Obama claimed would be “saved” from Medicare to help “pay for” the ObamaCare law?

Well, what that amounted to was slashing subsidies (i.e. reimbursement rates) for a popular supplementary program known as Medicare Advantage.

Problem: doing so will effect 12 million seniors.  Problem exacerbated: Seniors, who resist change especially to their health care coverage, are not likely to be happy.  Problem squared: Seniors will have to select a new program beginning October 15th, a few weeks before the election.

And both political parties know that seniors vote.  You can imagine the negativity of these cuts spreading like wildfire among senior communities in key states.

But, not to worry, our current most ethical and transparent administration in history has a solution:

Call it President Obama’s Committee for the Re-Election of the President — a political slush fund at the Health and Human Services Department.

Only this isn’t some little fund from shadowy private sources; this is taxpayer money, redirected to help Obama win another term. A massive amount of it, too — $8.3 billion. Yes, that’s billion, with a B.

And how will they deploy this money?

Benjamin Sasse and Charles Hurt explain:

But the administration’s devised a way to postpone the pain one more year, getting Obama past his last election; it plans to spend $8 billion to temporarily restore Medicare Advantage funds so that seniors in key markets don’t lose their trusted insurance program in the middle of Obama’s re-election bid.

The money is to come from funds that Health and Human Services is allowed to use for “demonstration projects.” But to make it legal, HHS has to pretend that it’s doing an “experiment” to study the effect of this money on the insurance market.

That is, to “study” what happens when the government doesn’t change anything but merely continues a program that’s been going on for years.

Obama can temporarily prop up Medicare Advantage long enough to get re-elected by exploiting an obscure bit of federal law. Under a 1967 statute, the HHS secretary can spend money without specific approval by Congress on “experiments” directly aimed at “increasing the efficiency and economy of health services.”

Past demonstration projects have studied new medical techniques or strategies aimed at improving care or reducing costs. The point is to find ways to lower the costs of Medicare by allowing medical technocrats to make efficient decisions without interference from vested interests.

Now Obama means to turn it on its head — diverting the money to a blatantly nonexperimental purpose to serve his political needs.

In an era of austerity, an executive department has what amounts to an 8 billion dollar taxpayer funded slush fund and has apparently chosen to use to help re-elect the president?

Really?

The good news is because of the attention brought to this ploy, just a couple of hours ago, the GAO spoke out about the planned use of the 8 billion dollars:

In a blow to the Obama administration on Medicare, government auditors Monday called for the cancellation of a costly bonus program for private health plans that congressional Republicans have criticized as a wasteful political ploy.

The nonpartisan Government Accountability Office said it’s not clear that the $8.3 billion Medicare Advantage bonus program will improve quality because most of the money is going to plans just rated average. The auditors did find, however, that the bonuses would temporarily ease the pain of unpopular cuts to insurance plans under President Barack Obama’s health care overhaul law.

The point of course, is it is a deferral of “pain” not any sort of look at an “experimental” means of improving health care.  It is election year politics with an 8 billion dollar price tag.

After all, the plan for ObamaCare was to have all the unpopular aspects of it kick in during 2013, after the election, after the President was unanswerable to the American people anymore and after he was provided with more “flexibility”.

The GAO is careful in its wording but read between the lines here:

GAO, the investigative agency of Congress, did not address GOP allegations that the bonuses are politically motivated. But, its report found the program highly unusual. It “dwarfs” all other Medicare pilots undertaken in nearly 20 years, the GAO said.

Most of the bonus money is going to plans that receive three to three-and-half stars out of a possible five stars on Medicare’s quality rating scale, the report said.

Available through 2014, the bonuses will soften much of the initial impact of the Medicare Advantage cuts, acting like a temporary reprieve.

This year, for example, the bonus program offset about 70 percent of the cuts in the health care law. Indeed, Medicare Advantage enrollment is up by 10 percent and premiums have gone down on average.

Or “Buying Seniors Off Until 2014”.  And yeah, if you’re still wondering, that’s politics.  The emphasized portions of both quotes are all you need to know to understand the “why” of my claim.  That reprieve would keep seniors from taking their angst and anger to the polls in November and the administration is eager to avoid that.

So, in the Chicago way, the Obama administration has figured out how to use tax money to help buy the next election.

Will the administration heed the GAO?  Will it cancel the program?

My guess is no – they’ll delay and prevaricate and do anything and everything they can to avoid killing the program.

At least until after the election.  Then?  Who cares.

Certainly not them.

Seniors, you’re being played for suckers.  You need to realize that.  And vote accordingly.

~McQ

Twitter: @McQandO


Economic reality welcomes new college grads

And it isn’t what they expected or hoped it would be:

A weak labor market already has left half of young college graduates either jobless or underemployed in positions that don’t fully use their skills and knowledge.

Young adults with bachelor’s degrees are increasingly scraping by in lower-wage jobs — waiter or waitress, bartender, retail clerk or receptionist, for example — and that’s confounding their hopes a degree would pay off despite higher tuition and mounting student loans.

An analysis of government data conducted for The Associated Press lays bare the highly uneven prospects for holders of bachelor’s degrees.

We continue to hear that we’re in a recovery, that we’re seeing better times, that all is now well.

Of course, it’s not.  In fact, as we mentioned in the podcast last night, we’re not seeing anywhere near the growth necessary to shake this recession.  Instead, we’ve found and are bouncing along the bottom (or at least what is the bottom for now – believe it or not, it could again get worse).

Unemployment numbers for the last two months have “unexpectedly” worse.  And while the official rate is 8.2%, most realize the real unemployment rate is much higher and in double digits.

That is the world today’s college grads are facing.  It is a buyers market, for those that are actually hiring college grads and so they are able to select among the best.  Guess what majors are faring best?

While there’s strong demand in science, education and health fields, arts and humanities flounder.

Majors with immediate applicability in still growing fields of course.  Meanwhile, there’s not much demand for the softer and less applicable fields.   And even in the majors where demand is still high, entry level jobs are of a lower type:

Median wages for those with bachelor’s degrees are down from 2000, hit by technological changes that are eliminating midlevel jobs such as bank tellers. Most future job openings are projected to be in lower-skilled positions such as home health aides, who can provide personalized attention as the U.S. population ages.

This is one of those teachable moments.  A sheepskin is no longer a guarantee to a high paying job.  And that’s certainly true of those who indulge themselves in a humanities or art degree, etc. 

College graduates who majored in zoology, anthropology, philosophy, art history and humanities were among the least likely to find jobs appropriate to their education level; those with nursing, teaching, accounting or computer science degrees were among the most likely.

While perhaps the brightest and best in those areas will indeed find good paying jobs coming out of the chute, the vast majority are going to be taking jobs, if they can find them, well outside their major field of study.

By the way, I use the term “indulge” above purposefully.  It would be nice to indulge yourself in something you might enjoy in college and major in it.  But then don’t whine when you find out that all of the companies you feel should have the benefit of your august presence aren’t as excited about your degree in gender studies as you are.

That gets down to the purpose of college to each person.  Is it a means of achieving a job and a life style to which one aspires and a willingness to do what is necessary to accomplish that?  Or is it a place one indulges themselves giving little or no thought to the reality that awaits them at graduation?

What we are seeing is the market for college grads making a very definitive statement.  It is sending signals.  It is telling everyone what type of degrees are being sought and which aren’t.  And because of the tightness of the market, it is making decisions on merit, with the brightest and best capturing jobs and the also ran’s waiting tables.

"I don’t even know what I’m looking for," says Michael Bledsoe, who described months of fruitless job searches as he served customers at a Seattle coffeehouse. The 23-year-old graduated in 2010 with a creative writing degree.

Imagine that … creative writing degree.  Wonderful stuff, but not to the market for those with college degrees.  One would think that a person pursuing that sort of degree would have probably researched that and have a plan which might not include someone else hiring them first (i.e. selling their work on a freelance basis, etc. and knowing how to do that).

Had Mr. Bldsoe had a degree in physics or accounting or engineering, he’d stand a much better chance of being employed in his field of study.  Then he could indulge himself in his creative writing passion.  In fact, it would likely give him the means to do that.

Instead … “you want a tall or a grande?”

I still haven’t yet figured out why supposedly bright people can’t figure that little thing out.  Markets are talking.  Markets are sending signals.  When you choose something as your major that these markets have no interest in, what do you suppose is going to happen unless you have a plan to go out on your own immediately?

They’re not going to hire you just because you feel your major is important.  You’re going to hire someone if they feel the major is important and  you have demonstrated competence in that field at a level they require.

This is the reality that, for the first time, many recent college grads are coming to grips with.

One thing this recession may finally do is drive home the idea that indulging yourself is a useless degree is not very bright or productive.

Want to study creative writing?  Fine.  They have minors as well in colleges.  Make it your minor.  But for heaven sake, take a clue and look at what is being demanded out there before declaring a major.  Certainly it may not be your passion, but then unless you want to spend your days immediately after college waiting tables or hoping for a labor sellers market, where jobs are plentiful, you had better commit to a useful major.

I know, I know, that supply and demand thingy again.  Gender studies majors aren’t into “markets” and “supply and demand” stuff. What’s wrong with me?  They have a college degree, the world should be beating a pathway to their door, no?

No.

Welcome to reality … and reality includes the immutable laws of economics whether one likes them or not.  And right now, those with useless degrees find themselves on the wrong side of the demand curve.

Don’t like economics?

Then content yourself with making frappes.

Otherwise, it’s time to wise up, use that superior brain for what it was designed and “indulge” yourself in something the job market finds useful and valuable.  Refusal to do that means a guaranteed rough transition into the real world, especially now.

~McQ

Twitter: @McQandO


Observations: The QandO Podcast for 22 Apr 12

This week, Michael, and Dale talk about the Trayvon Martin case, Hillary Rosen, and the economy.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.


Saturday Link-O-Rama

Got to tell you, my heart just goes out to the poor baby </sarc>

Booed at Fenway.  More unpopular than the Yankees.

And meanwhile, the big money just isn’t rolling in like it did.

But guess who is still bundling for Obama?

Here we go again.  Why don’t we just get it over with and make it $100 an hour. $500?  They just don’t get it do they?

Guess what industry is driving Ohio’s economic recovery and … jobs?

Is California becoming unaffordable for the majority of people?

Really?

Why blacks die younger.  Hint: It has nothing to do with race.

Why the middle class is doomed.

Is the left committed to “Social Creationism?”

The UN: A case study in failure.

What obstructs the “pursuit of happiness”?

~McQ

Twitter: @McQandO


There’s a reason Nancy Pelosi is the least popular member of Congress

She’s dangerously thick but in a position of power.  This is the woman who attempted to redefine what it means to be Catholic (because actual Catholicism didn’t support her views on abortion).  She passed a piece of legislation called ObamaCare without even knowing what was in it.

Now she wants to redefine free speech.  Said Ms. Pelosi, while discussing Citizens United v. FEC (via The Rightscoop):

We have a clear agenda in this regard: Disclose, reform the system reducing the roll of money in campaigns, and amend the Constitution to rid it of this ability for special interests to use secret, unlimited, huge amounts of money flowing to campaigns.

I think one of the presenters [at a Democratic forum on amending the Constitution] yesterday said that the Supreme Court had unleashed a predator that was oozing slime into the political system, and that, indeed, is not an exaggeration. Our Founders had an idea. It was called democracy. It said elections are determined by the people, the voice and the vote of the people, not by the bankrolls of the privileged few. This Supreme Court decision flies in the face of our Founders’ vision and we want to reverse it.

Obviously she’s about as much a Constitutional Scholar as our President. 

The First Amendment pertains to freedom of political speech and requires Congress to “make no law …” that would suppress it.

Ed Morrissey said it best:

The best campaign finance reform is still transparency. If burning a flag in the street is free speech, then so are political contributions, especially when made in the open. If the reformers in Congress want to clean up elections, then force immediate reporting on the Internet of all contributions to all presidential, Senate, and Congressional races, and full weekly financial reports on expenditures. That will do more than all of the speech-restricting, unconstitutional efforts made since Watergate, and make the entire system a lot more honest.

That’s where she and the left should be headed with this (after this campaign season of course – they want all that slime to flow into their coffers for at least the rest of this year).

Bottom line, Ms. Pelosi – “Congress shall make no law …”.

What part of that don’t you understand?

~McQ

Twitter: @McQandO


Another example of why government picking winners and losers normally ends with #FAIL

The other day this sort of slipped under the media radar:

First Solar Inc. will lay off 2,000 workers and close its factory in Germany following a collapse in solar panel prices that has erased the industry’s profits and forced some smaller companies into bankruptcy.

America’s biggest solar manufacturer said the layoffs amount to 30 percent of its global workforce.

B..b..but why!?  Green shoots, alternative energy, clean energy, what the frack?!

This is the future, the government says so!  How did it all go so wrong?  How in the world could solar panel prices “collapse”?

An influx of Chinese competitors has led to a rapid buildup in supply. At the same time governments in Europe, the biggest market for solar power, are reducing generous subsidy programs that had fueled demand. From March to December last year, solar panel prices dropped 50 percent, said Aaron Chew, an analyst with the Maxim Group.

Oh.

That damn “supply and demand” thingy again, right?

So let me get this straight … cheap foreign product (subsidized by the Chinese government) flooded the market created by government subsidized demand, driving up supply while lowering the price. Meanwhile the false demand that had been supported by “generous [government] subsidy programs” ended (thus ending the “demand”).  Consequently there is no demand for the current over supply and no one is buying the stuff?

Wow … who could have seen that coming?

And the current producer can’t make a profit and thus has to lay off people?

Oh.

You know, when you’ve seen the same thing over and over and over again (see Einstein’s definition of insanity), sometimes you just have to resort to sarcasm.

By the way for the terminally slow – news flash – that supply and demand thingy also seems to work in the petroleum market as well. 

Go figure.

~McQ

Twitter: @McQandO

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